Question-1Pleased with the way you handled his complaint, Bob recommends you to his 45 years old son, Basil. Basil Butler is a management consultant who is living and working with his wife Daisy in Manhattan. Basil sends you an email, explaining that his 41 year old wife is expecting triplets in six months’ time. They plan to return to Melbourne next month and take up residence in their old warehouse apartment in Fitzroy. They need urgent help because their neighbour is planning to sell her adjoining apartment, which they wish to secure. Daisy loves her old place and dreams of extending their living space by acquiring and renovating the neighbour’s apartment. She envisions demolishing part of the shared wall to join the two apartments into one large, liveable space for a family of five. Basil’s firm is relocating him to the Collins Street office. Daisy, however, is a contractor who has successfully completed a series of projects for Basil’s firm. She has been self-employed for 10 years and does not intend to work for the next five years. Basil earns $200,000 p.a. and Daisy earns $130,000. They owe $280,000 on the Fitzroy apartment, but they own a beach house in Portsea outright. The beach house is valued at $650,000. With a penchant for luxury cars, they also have $60,000 to repay on their BMW and $10,000 on the vintage MG. They have put the majority of Daisy’s earnings into her superannuation fund, which has now accrued $400,000. Basil is unsure how much is in his superannuation fund, Sadly, they invested the bulk of Basil’s earnings in a share portfolio which crashed with the global financial crises. The portfolio dividends only paid $5,000 last financial year. Together, they have $127,000 in a savings account and $50,000 invested in a long term deposit. The reserve price on the neighbour’s property is $510,000 however, she is prepared to sell it for $495,000 if she does not need to engage a real estate agent and if they will commit to a 30 day settlement. She has given Basil and Daisy the option of a private sale and two weeks in which to make her an offer. As she is divorcing, she is not prepared to extend the time to allow Basil and Daisy to secure finance in Melbourne in person.Basil and Daisy are too busy packing up their Manhattan loft to search for finance options. They want you to find a suitable loan with attractive terms and arrange all the necessary paperwork. Timing is their utmost concern.a) Respond to Basil’s email by taking the following steps:I. Analyse Basil and Daisy’s financial position based on the extent of their disclosures. Use a financial calculator or relevant software systems to help calculate their personal and financial situation.II. Outline the relevant processes for proper execution of loan documentation and determine whether you will be able to implement the necessary actions within the neighbour’s timeframe. Also note whether there is any need for specialist advice or involvement from other main sectors of the financial services industry in this case.III. Describe how you will submit the documentation to the appropriate lender in an appropriate manner to protect client confidentiality.IV. Research product and additional industry information, then apply your industry knowledge to the current situation. Synthesise this information into a clear and concise format (e.g. short report or proposal) so that Basil and Daisy can make an informed decision.V. Write an email to Basil and Daisy to establish and confirm their priorities:• Establishing their risk tolerance and determining their investment goals and expectations.• Ask for any additional information you require to complete your analysis in accordance with your firm’s credit policy.• Provide Basil and Daisy with an overview of the three best products you believe are most suited to their needs. Be sure to discuss the strengths, weaknesses, benefits and risks, fees and charges attached to each product.b) Use the responses Basil provides above and update his client records accordingly in a format and location readily accessible to other appropriate advisers. Describe how you are going to prevent fraud and verify Basil’s and Daisy’s identity/signature and their other undertakings when you are not able to meet them person.c) Write a confirmation email to Basil outlining the following:• Basic requirements of the loan, including the amount, term and interest rate.• Disclose whether you have a strategic and commercial relationship to the recommended product.• Outline which documents you have attached as per compliance requirements.• Describe the appropriate timing of events in the loan approval process. Check your writing for accuracy and readability.d) (i) Download and complete the loan documentation (this is found in your study portal) (Attached MS EXCEL file name So Sweet Loan Application)Basil and Daisy require in a way that accurately reflects their financial situation, personal information and complies with lender requirements and guidelines. (ii) Describe how you checked it for accuracy and intend to submit it for approval. (iii) The new mortgage broker in the firm used a word document for loan applications previously and has never used excel before which is the form the loan documentation is presented in. Given the loan documentation has to be done promptly to meet the client’s requirements how will you enable the new broker to deal with the change in technology in a timely fashion? Question 2a) Explain to your client what a 100% loan is?b) Write an email to the lender or solicitor acting for the lender to arrange the drawdown of the funds ensuring the funds are disbursed in accordance with the requirements of loan approval and instructions received from the client.c) Write a letter to the client advising them of the disbursement of funds, date of settlement, manner of disbursement and other relevant details. Use a proper format including the date, your address and signing off.d) Order the completion of the above three tasks.Question 3You begin work at your new place of employment. One of your key responsibilities is to process application for credit. Your new manager, Robson Mischkulnig, is aware of your background as a mortgage broker and wants to draw upon your existing knowledge base. As such, he asks you to bring in the last credit application you managed to help train you into your new role. Equipped with Basil and Daisy’s application, you begin one week of induction. You are given a copy of the ‘Sample Credit Policies and Procedures Manual’, and told these are the guidelines that inform you day to day decision making. Supplementing the manual are other protocols and laws such as the National Credit Act. You are told that in this office, decisions to reject or accept an application are formed on basis of two criteria; credit policy and the total credit assessment which you should conduct. Any decisions to advance funds or extend credit that fall outside your approval or limits of authority must be referred to relevant approving personnel. In your case, this is Robson. You are expected to prepare and forward your recommendations to accept or reject applications to Robson promptly and in accordance with the organisation’s procedures. Of course, any required security must also be attached. Your trainer emphasises another key responsibility for those providing credit and credit reporting services. That is to keep the records system up to date. This means recording and monitoring file and record movements as well as maintaining the records according to legislative requirements and organisational policies and procedures.Having worked through the essentials, your trainer throws you in the deep end and asks you to follow the procedures and process the sample credit application you brought with you. To test whether you are competent, you are given the following questions to complete.a) Do you recommend that Robson should accept or reject Basil and Daisy’s application? Provide financial and legal reasons to justify your decision and present them in the same format you would use for Robson to review your decision.b) Under what circumstances are you expected to refer your decisions to Robson? Does this application fall outside your approval or limits of authority? Why or why not?c) What kind of security would be required in this case? What other issues need to be addressed following a loan approval to assist with the loan settlement?d) So sweet uses client loan application (remember your last case study, loan application of Basil and Daisy) as the beginning of their client database. Update the client database with Basil and Daisy’s details from A to C above, and then outline the steps you would take to monitor file and record movements. What other points to you need to remember in order to keep your records up to date?